Devanahalli project: Govt keeps Siemens Ventures on toes

bangalore: the siemens ventures led consortium, preferred as the joint-venture partner for the bangalore international airport at devanahalli will be asked to further reduce the airport costs and state support, as well as expedite construction. the consortium had scored over the hoctief airport gmbh-led consortium on the basis that it quoted a lesser construction cost (rs 1,128 crore) against the hoctief-led consortium (rs 1,487 crore).it also asked for lesser state support -- rs 430 crore (38.12 per cent) -- against hoctief's rs 611 crore (41.08 per cent). construction time given by siemens fits into the government's vision of the project getting completed within 30 months from the date of actual construction. hoctief had asked for 36 months. still, despite these favourable terms, sources told the times of india on tuesday that the government still wanted to negotiate a lower cost and more importantly, a lower state support. "we think it can be pushed down and we will try to get the best deal possible," sources added. the government has kept its option of "negotiating" with hoctief still open and this could be decisive in pushing down the seimens prices. the government, meanwhile, will set up a negotiating team to thrash out these details with the siemens representatives. the four-point agenda for the team is to optimise project cost, reduce state support, work out the share-holder agreement and the airport concessions agreement. siemens, meanwhile, has projected april 2005 as the date to start commercial operations, five months behind chief minister s.m. krishna's announced deadline of december 2004. "this is because their date to start construction is july 2002. if we advance this, we can finish well within the cm's deadline," sources maintained. hoctief is further delayed with a projected completion date of september 2005. siemens has projected that construction will be complete by january 2005, with the next three months set aside for field trials. "they think financial closure will take time and that is why the starting date is as late as july 2002," sources contended. the government, however, is confident that the financial closure will happen within the next six months. about 60 per cent of the project cost will be raised as a loan, so it is expected that more than one financial institution would have to lend for the project. "we will push to ensure that the financial closure will get done as soon as possible and actual construction begins earlier than their projected date," sources added.